Altria Group (NYSE:MO) sells cigarettes, oral nicotine pouches, and vapor products to adult tobacco users in the US. It’s the parent of Marlboro, still the country’s top-selling cigarette brand. The stock showed up in Donald Trump’s disclosed portfolio, and it’s easy to see the appeal: over 50 straight years of dividend increases and a business that doesn’t move much with the economic cycle.
MO Is Beating the Market
Altria stock is up around 25% year to date. Over the trailing 12 months, the stock is up about 24%, ahead of the market’s 19% gain. Only Philip Morris, up 21% YTD, comes close among the major tobacco names. British American Tobacco and Japan Tobacco are each up 10%.
What Happened in Q1
Altria’s Q1 2026 earnings beat expectations on both lines. Net revenue grew 3.2% year over year mostly from pricing, not volume. Adjusted diluted EPS grew 7.3%, up from 4.4% growth in 2025.
The volume story is also improving. Altria’s smokeable segment declined just 4% in Q1 2026, down sharply from a 12% decline a year earlier. On the oral tobacco side, on! PLUS nicotine pouches rolled out nationwide in March and are now in roughly 100,000 stores, covering 85% of the nicotine pouch category by volume. On!’s own volume grew 17.6% year-over-year in Q1, after growing 11% for all of 2025. It’s also the first product authorized under the FDA’s streamlined pilot review program for oral nicotine pouches.
Valuation
Valuation looks more reasonable than the stock’s run-up suggests, too. Even after the rally, Altria trades at roughly 13x forward earnings — a 14% discount to the sector median of 15x, and in line with British American Tobacco. Philip Morris trades at a real premium to both.
The Bear Case
The rally has pushed multiples up across the board, and some of Altria’s other numbers look stretched. Its forward PEG ratio near 3.47x runs about 72% above peers’ 2.02x, and its price-to-sales ratio of roughly 6x is about six times the sector median. That combination says the market is pricing in more growth than Altria has actually delivered lately: over the trailing 12 months, revenue grew just 0.65%, well behind the sector median near 3%, and diluted EPS actually fell 20% over that same stretch.
The core business is still shrinking. Cigarette industry volume was estimated to be down about 7% last quarter, and the adult smoking rate in the US has fallen to an all-time low near 9.9%. Marlboro’s own retail share slipped from 41.1% to 39.7% over the past year. Oral tobacco, Altria’s best growth story, grew only 2.3% as a category in Q1 2026, dragged down by declines in Skoal and Copenhagen even as on! grows. Whether nicotine pouches turn into a durable, large-scale replacement for cigarette revenue.
Q1 showed real signs of stabilization. But after a 25% run this year, the stock isn’t the deep-value dividend play it used to be. It trades at a discount to peers on a forward P/E basis, but at a real premium on growth-adjusted multiples like PEG and price-to-sales, with weak trailing revenue and earnings growth behind it. Whether MO is a buy here comes down to which side of that gap matters more to you.
Pixabay/Public domain
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